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Tax amendment process must be simple

Responding to HMRC’s consultation on amending tax returns, ICAEW is calling for a simple method that recognises the complexity of the current system, while accommodating ‘digitally excluded’ tax payers.


March 2019

ICAEW has responded to the Call for Evidence: Amendments to tax returns published by HMRC on 7 November 2018. The response is published as ICAEW REP 22/19.

ICAEW supports the government’s ambition for an amendments process that is simple and transparent, while noting that it is the complexity of the underlying tax rules which often makes an amendment necessary, particularly where the original tax return was prepared by a non-tax professional.

In straightforward cases, ICAEW would expect a system that allows (or requires in the case of VAT) digital filing to allow subsequent in-time amendments by the same method (that software must be able to facilitate), which retains an audit trail of such amendments, and which HMRC can override to allow late amendments by exception where necessary. ICAEW does not consider it possible at this time to implement a digital method of correction that works for all tax returns and all taxes.

Any digital solution must also accommodate the digitally assisted and excluded, which will mean that amendments must also be possible on paper or by telephone.

It is important that taxpayer rights are neither diluted nor limited as a result of any changes following this call for evidence. In particular:

  • the ability of taxpayers to protect themselves from discovery assessments;
  • the ability to make unprompted disclosures; and
  • the availability of overpayment relief. In the case of overpayment relief, extending the right to amend tax returns to within the four-year overpayment relief window would be an administrative simplification.

This article first appeared in the ICAEW Tax Faculty’s weekly news update.

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